Alibaba purchases US$586m stake in China’s Sina Weibo

AFP, BEIJING

Wed, May 01, 2013 - Page 15

Chinese online retail giant Alibaba (阿里巴巴) has struck a deal to buy a US$586 million stake in popular Chinese social network site Sina Weibo (新浪微博) amid rumors that it is preparing for a stock market listing.

It also comes as Alibaba, China’s biggest online retail company, gets set for a handover of power from founder Jack Ma (馬雲) to executive vice president Lu Zhaoxi (陸兆禧).

18 PERCENT STAKE

Alibaba will pay Sina Corp (新浪) for an 18 percent stake in Sina Weibo, a Twitter-like site that claims to have more than 500 million members in China, valuing it at about US$3 billion.

The deal also enables Alibaba to “increase its ownership in Weibo to 30 percent ... within a certain period of time in the future,” Sina said on its Web site, adding that the two sides would cooperate on e-commerce projects.

The deal comes as analysts expect Alibaba to announce an initial public offering this year, with some suggesting the company could be valued at more than US$100 billion.

RIVAL

The deal would strengthen Alibaba relative to Chinese rival Tencent Holdings (騰訊), which in the past year has unveiled ambitious plans in the Alibaba-dominated e-commerce business, Dow Jones Newswires said.

Alibaba’s businesses include Taobao (淘寶), China’s most popular online shopping site, which had more than 800 million product listings and more than 500 million registered users as of last year.

Stocks in US-traded Sina jumped 10 percent after the deal was announced on Monday.